Elon Musk Is Teasing a Tesla and SpaceX Merger Again

Elon Musk runs both SpaceX and Tesla. Investors have long wondered if the world’s richest human would combine his two trillion-dollar companies. (Spencer Platt/Getty Images)

Key Points

• Elon Musk hinted at a potential merger of Tesla and SpaceX during an appearance on the All-In Podcast.
• The two companies are already collaborating on a jointly built Terafab chipmaking plant and shared research and development.
• Neither Tesla nor SpaceX responded to requests for comment regarding a potential merger.

Tesla and SpaceX CEO Elon Musk hinted at combining his two trillion-dollar companies on Monday. It’s barely budging either stock.

Musk appeared on the All-In Podcast with SpaceX President Gwynne Shotwell. The conversation was wide-ranging, touching on Starlink, Starship, AI data centers in space, and government regulation, among other things.

Collaboration between Tesla and SpaceX was also discussed, with Musk reviewing the Terafab chipmaking plant being jointly built by the two companies, as well as shared R&D that happens at Tesla’s manufacturing campus in Austin, Texas.

Eventually, Musk was asked why he still has two separate companies, referring to Tesla and SpaceX. “Great question,” said Musk. “With all this collaboration on so many levels, who can imagine what action one might take.”

Tesla and SpaceX didn’t respond to a request for comment about a merger.

Musk’s response sounded playful. Perhaps Musk is tired of being asked. Speculation about a Tesla-SpaceX merger has raged for months, with several Wall Street analysts, including Barid and RBC, believing it will happen.

Or maybe he thinks the answer is obvious.

The main benefit of a merger is control of the entire AI value chain, from AI chips to computing to digital applications to AI-infused hardware and manufacturing.

SpaceX runs its Grok models at its AI data centers. Tesla uses AI to train cars it manufactures to drive themselves. There are synergies. The main synergy, of course, is Musk, who runs both companies.

The market is acting as if the podcast isn’t all that surprising, though. SpaceX stock was up 0.4% in premarket trading Tuesday at $148.74. Tesla shares were down 0.1% at $358.67, while S&P 500 and Dow Jones Industrial Average futures were down 0.3% and 0.4%, respectively.

The merger would be big news. Exactly when it could happen or at what price for either firm is difficult to predict. Those are also reasons investors aren’t acting, or overreacting, to Musk’s comments.

Write to Al Root at allen.root@barrons.com.

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